Question

ing Corporation began operations in January of the current year. The charter authorized the following stock:

Preferred stock: 10 percent, $13 par value, 40,700 shares authorized

Common stock: $8 par value, 85,200 shares authorized

During the current year, the following transactions occurred in the order given:

1. Issued 22,500 shares of common stock for $12 per share.
2. Sold 7,400 shares of the preferred stock at $23 per share.
3. Sold 1,900 shares of the preferred stock at $23 per share and 2,200 shares of common stock at $13 per share.

Required:

Provide the journal entries required to record each of the transactions in (a) through (c). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1 2 Issued 22,500 shares of common stock for $12 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit а.

Answer 1

Answer
date	accounts & explanation	debit	credit
a	Cash (22500*$12)	$     2,70,000
	Common stock ($8*22500)		$     1,80,000
	Additional paid in capital - Common stock ($4*22500)		$        90,000
	(To record issue of 22500 common stock for $12)
b	Cash (7,400*$23)	$     1,70,200
	Preferred stock (7,400*$13)		$        96,200
	Additional paid in capital - Preferred stock (7,400*$10)		$        74,000
	(To record issue of 7,400 preferred stock for $23)
c	Cash (1900*23)+(2200*$13)	$        72,300
	Common stock (2200*$8)		$        17,600
	Preferred stock (1900*$13)		$        24,700
	Additional paid in capital - Common stock (2200*$5)		$        11,000
	Additional paid in capital - Preferred stock (1900*$10)		$        19,000
	(To record issue of common stock for $13 and preferred stock for $23)
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